Comptroller of Stamps (Vic) v Howard-Smith

The Comptroller of Stamps (Victoria) appealed to the High Court of Australia against a decision of the Supreme Court of Victoria. The dispute concerned the assessment of stamp duty on a letter written by Harry Bellingham Howard-Smith to a trustee company. The trustee company was both the executor and trustee of Howard-Smith's deceased wife's estate and also his attorney under a power of attorney. Howard-Smith, as the residuary beneficiary of his wife's estate, directed the trustee company in the letter to pay specified sums from his interest in the estate to named persons and institutions. The Comptroller assessed this letter for stamp duty under Item IX of the Third Schedule to the Stamps Act 1928 (Vic.), which pertains to deeds of settlement or gift.

The legal issue before the High Court was whether the letter of directions constituted an instrument whereby property was settled or given, thereby attracting stamp duty under the relevant provision of the Stamps Act. Specifically, the court had to determine if the letter operated as an equitable assignment of Howard-Smith's interest in his wife's estate, or if it created a trust in favour of the named beneficiaries, such that it was an instrument of settlement or gift.

The High Court, affirming the decision of the Supreme Court of Victoria, held that the letter was not an instrument of settlement or gift and was therefore not dutiable. The court reasoned that the letter was merely a request or mandate from Howard-Smith to the trustee company, authorising it to make payments from his residuary interest. It did not, in itself, divest Howard-Smith of his equitable interest or create a binding trust in favour of the named recipients. Key factors in this reasoning included the discretionary nature of the payments (in shares or money), the fact that the payments were to be made out of an undefined mass of the residuary estate, the language of request used in the letter, and the fact that the letter was not communicated to the intended beneficiaries, suggesting it was revocable until acted upon. The court distinguished this situation from a clear assignment of an equitable interest or the creation of a trust, noting that the trustee company was acting both as executor and as Howard-Smith's attorney.

Consequently, the High Court dismissed the appeal by the Comptroller of Stamps, upholding the Supreme Court's determination that the letter was not chargeable with stamp duty.